Companies should consider making cuts in other areas of their businesses in order to offer improved packages to existing and potential employees.
That’s according to YouatWork.com, which cited the comments of the reward and performance advisor for the Chartered Institute of Personnel & Development (CIPD), Charles Cotton.
Cotton claimed that although companies had been unable previously to offer a raise for its employees, it should think about its priorities and consider the other areas in which they could cut costs, in order to increase wages.
Furthermore, the expert said businesses could take a leaf out of their competitors’ books in order to make the right types of cuts; claiming: “It is also worth looking at what the organisation is doing at the moment and if there is a way you can reduce other costs in order to give increases to employees.”
If more companies take Cotton’s advice, it may increase the productivity of existing employees, and the motivation of those seeking jobs in London and other places to choose one firm’s offer of employment over a competitors’ – particularly if they also took on Cotton’s suggestions regarding shares.
The performance advisor went on to say that if companies really couldn’t stretch to a rise in pay, they could offer incentives such as a portion of the company’s shares.
Cotton suggested: “In lieu of a pay rise, you could offer them some shares in the organisation, and if the organisation then starts to return to profit, they have got these shares that they can potentially cash in.”
Cited on Managers.org.uk, Cotton added that this could be an idea adopted by many firms in the future, particularly if they believed good times were ahead in terms of profit and turnover.